Wisconsin dairy farmers who are members of the cooperative Dairy Farmers of America received news a week ago that no dairy farmer ever wants to hear: that they should consider voluntary dumping of milk amid market concerns during the COVID-19 pandemic.
In a statement, Kristen Coady, vice president of corporate communications at Dairy Farmers of America, said that demand for dairy products is changing during the pandemic, ultimately resulting in an overall surplus of milk.
“While we initially saw increased demand at grocery stores as consumers stocked up on many products, like dairy, in anticipation of potential quarantines and shelter-in-place orders, the retail demand is starting to level off,” she said.
Additionally, there has been a reduced need in the food service sector, specifically schools and restaurants.
These sudden changes in demand are forcing some dairy manufacturers to cut or change production schedules as many are already operating at capacity. And in some circumstances, like the one at Golden “E” Dairy Farm in Fredonia, some farmers have been asked to voluntarily dispose of raw milk on their farms.
Ryan Elbe, who farms with his parents, Chris and Tracey, and his siblings Kimberly, Matthew and Kyle, received a phone call two weeks ago from his field representative, informing their family that milk dumping was a possibility and asking if they would be willing to do it. Because they indicated they could, they later received another phone call from their DFA central region manager with the official ask for the voluntary dispersal of milk.
“It’s not some — it’s all of it,” Elbe said. “All the milk that was loaded on March 31 was dumped that day, and we’ve been dumping every day since then.”
Elbe has been asked to continue dumping milk from his farm until mid-week, disposing of 220,000 pounds of milk every day.
“I don’t know whether or not they’ll have us continue. We should know by Monday if it’s prolonged,” he said. “I hope not, but anything is possible at this point.”
Elbe’s farm is the only dairy farm in the immediate area that has been asked to dispose of milk, but it appears about 10 other larger dairies in southeastern Wisconsin have also been asked to voluntarily dump milk by DFA. It’s Elbe’s understanding that DFA strategically selected larger dairy farms to ask as they have the capabilities to properly dispose of fluid milk and are producing at a larger volume.
Golden “E” Dairy Farm encompasses 5,000 acres, milking 2,400 cows three times a day. The Elbes haul their own milk, with 99% of it shipped to Kemps LLC in Cedarburg.
“It all happened so fast — we’re still in disbelief that it’s happening,” Elbe said.
He has been told that the farm will be reimbursed for the milk it had to dispose of; however, Elbe is unsure if that reimbursement is coming from DFA or from the federal government. He has been keeping close track of all the pounds going down to drain for when that time comes.
“Farmers in the area, even if they don’t ship to DFA, were very upset,” Elbe said. “They were in disbelief, like us, and angry. They felt sorry for us, but I think many of them have cooled off and are now thinking about what else can be done.”
Others have been reaching out to Elbe on Facebook with questions about whether the dumped milk can be sent to other states with perceived milk shortages or given to local food pantries. Elbe has had to explain that “we, as a farm, cannot just hand out milk,” and although they are providing a fresh, nutritious product, they have no control over where it goes after it is provided to dairy processing facilities.
“It’s disheartening to not see milk from our farm on shelves at the grocery store right now,” Elbe said. “But I do believe there is reasoning for DFA to do this and there has been an open line of communication. I wouldn’t want to be in their shoes making these decisions.”
As of April 2, UW-Extension Dairy Outreach Program Manager Mark Hagedorn said factors like infrastructure, transportation and processing networks and the lower volume of milk producers in the western part of the state meant that, thus far, farmers being asked to dump milk were primarily fluid-milk producing dairies located in the eastern and southeastern parts of the state.
Tammy Smith Schroeder of Bears Grass Dairy in Augusta said she is thankful they haven’t been asked to dump milk yet on the Eau Claire County farm she owns with her husband, Gary Schroeder, his brother, Don, and their nephew, Donald Honadel. The family and employees milk about 400 cows twice a day in a double-12 parallel parlor.
“It’s scary. Milk prices are dropping down to where it’s impossible to survive, but it’s better to get something for it than nothing,” Smith Schroeder said. “Employees still have to be paid. The cows still have to be fed.
“Every day, I breathe a little bit easier when I see the milk truck come up the driveway.”
Hagedorn said the volatility of everything surrounding COVID-19 makes it difficult to predict what the impact on the dairy industry will be from one day to the next.
“This is one of the most rapidly evolving and changing situations I’ve seen in the 35-plus years that I’ve been involved with the dairy industry,” Hagedorn said. “I’ve never seen anything like this. It’s difficult to be proactive. And even when you are proactive, you end up coming off looking reactive. That is really very frustrating.
“It wasn’t a month or two ago that we were looking at $18 milk and the optimism was even on the uptick. It’s just mind-boggling how rapidly you can go from there to $12 or $13 on the futures market in May. It’s bleak.”
For the past three weeks, the Wisconsin Cheese Makers Association has been reaching out to its 105 member companies that make dairy products, including 25 of those whom are cheesemakers, and the 600 suppliers that provide ingredients, equipment and more to those companies to assess the current situation with dairy plants in Wisconsin.
John Umhoefer, executive director of the Wisconsin Cheese Makers Association, said the biggest hit to their industry comes from the inability to move cheese through food service; about 44% of all U.S. cheese sales are filtered through food service, including schools, restaurants, universities, destinations and institutions. And with 75% of Americans following a shelter-in-place order, “gains made in retail are not able to make up for losses of the closure of hundreds of thousands of restaurants,” Umhoefer said.
The number one concern amongst his membership is market uncertainty — and just how to keep the milk flowing during this time. Some cheese companies with a retail focus are doing okay, but others with a food service focus are struggling, he said, and the association is helping them move the milk around.
“We’re seeing unprecedented cooperation among companies to move that milk to where it needs to go so it gets to a market where it can either be a storable product or to help them find a market in retail,” Umhoefer said.
Members of the association are also concerned about their workforce itself, asking for guidance on the best ways to keep their workers safe during the pandemic. Keeping dairy farmers and workers in dairy processing facilities safe is a strong priority, and safety efforts are being expanded in an already food-safe forward industry.
The association, along with a handful of other dairy organizations, submitted a letter to the U.S. Department of Agriculture urging the federal government to provide direct assistance to farmers and to expedite the purchase of additional dairy foods amid unprecedented disruptions in supply and demand.
“Direct relief to dairy farmers and a substantial purchase of dairy commodities by USDA can ensure our industry will remain fiscally able to function in its primary role of feeding the nation and the world,” the letter said.
“People in the processing industry are working non-stop and everyone is talking with everyone to make sure milk stays flowing in the state,” Umhoefer said. “It’s devastating to see milk that doesn’t get processed so when we can reach out, like we did to the USDA, that’s very important.
“I just want people to know the industry is working tirelessly here to get the milk processed and to cooperate with each other to make sure we can get the milk into the system and into great dairy products.”
The Wisconsin Department of Agriculture, Trade and Consumer Protection, under the direction of Gov. Tony Evers, also penned a letter urging the USDA to step in and support the dairy industry amid concerns about milk disposal during the COVID-19 pandemic.
“With agriculture’s massive $104.8 billion impact on Wisconsin’s economy, it is critical that all of us in this industry work together to navigate this new territory,” said Randy Romanski, DATCP interim secretary. “DATCP has been in constant communication with people in all parts of the industry and hearing their concerns, including concerns about milk disposal. That’s why we’re urging the USDA and Wisconsin’s congressional delegation to take immediate action to keep the supply chain flowing and get product in the hands of people who need it most.”
The Country Today assistant editor Nate Jackson contributed to this report.